“I got you, Babe.” It’s not just the title of a 1965 Sonny and Cher hit—it also aptly describes the relationship between a named insured and its additional insured. To clarify, an additional insured may be able to access the coverage provided by the named insured’s liability policy if the additional insured is potentially liable for a claim that relates to the named insured’s operations or premises. For a startup company, additional insured protection can be extremely beneficial, particularly if the additional insured doesn’t have to tap its own insurance or other resources to pay a claim. And, although there are a few drawbacks to additional insured status, these typically are outweighed by the benefits.

In this three-part Founder’s Tip series, we review some of the nuances of additional insured protection, not only by defining the term and how to obtain such coverage (Part I), but also by outlining its benefits and disadvantages (Part II), and by listing various risk management tips specific to additional insured status (Part III). At the end, you should have enough information to determine whether additional insured coverage is as “groovy” as it sounds.  Click here to continue reading the blog post.